The Landlord and Tenant Act 1987 gives tenants the right to know who their landlords are and where to serve notices or proceedings on them. It provides that demands for payment must contain the name and address of the landlord and, if that address is not in England and Wales, an address in England and Wales at which tenants can contact their landlord. Failure to comply with these requirement means that rent and service charges are not lawfully due: section 47 Landlord and Tenant Act 1987.
Cannon v 38 Lambs Conduit LLP [2016] UKUT 371 (LC); [2016] PLSCS 235 concerned the relationship between section 47 of the 1987 Act and section 27A of the Landlord and Tenant Act 1985. Section 27A enables parties to apply to the tribunal for a determination as to whether a service charge is payable and, if it is, by whom, to whom and in what amount, and as to when, and how, any such charge must be paid. The question was whether non-compliance with section 47 deprives the tribunal of that jurisdiction.
The judge decided that non-compliance with section 47 does not prevent a tribunal from considering an application under section 27A on the ground that the charge is not yet due. The tribunal does not have to be satisfied that the charge is payable here and now – and can determine that a charge (which it may quantify, if required to do so) is payable, if the landlord serves a section 47 compliant demand on the tenant.
The other question for the tribunal concerned the landlord’s legal costs. Did the parties’ lease, and the service charge clause in particular, permit the landlord to recover legal costs incurred by the landlord in the course of a dispute with its tenant about the apportionment of its service charge? The judge considered previous decisions before reaching his conclusions, but took the view that they did not carry a great deal of precedential weight because each case will turn on the meaning of the words used in the parties’ lease.
The lease did not expressly refer to the recovery of the landlord’s legal costs in the context of a service charge dispute – and it would be a considerable departure from the natural and ordinary meaning of the words used to say that the landlord’s legal costs were “for the purpose of complying with” its obligations to insure, to confer quiet enjoyment and/or to repair the premises. The judge was also unhappy about the suggestion that the costs could be included in “the cost of management of the building”. A comparison with the highly specific language used elsewhere in the lease, confirming the specific circumstances in which legal costs would be recoverable, indicated that the parties did not intend the cost of legal proceedings between the landlord and tenant in connection with the service charge to be included within the scope of this provision.
Section 47 popped up again here too. Did the landlord’s failure to serve a section 47 compliant service charge demand mean that the legal costs incurred by the landlord during the service charge dispute had been unreasonably incurred? Unsurprisingly, the judge decided that this really did not follow.
Allyson Colby is a property law consultant
